Sunday, June 1, 2014

The A-B-C's of Nixon's Rise


A Loose End from Chapter 16

While editing Chapter 16 of The Great Heroin Coup, I happened upon a fascinating connection with previous Quixotic Joust posts related to Florida's land boom during the 1920's, in particular with Maude Cody Fowler, alleged niece of the late Buffalo Bill Cody, whose son had worked with Paul Helliwell in 1934 in a company set up to distribute liquor as soon as prohibition was repealed. As we shall see below, that same year Meyer Lansky went to Cuba, seeking ingredients for his now legitimate liquor business, acquired when it was illegal and, therefore, much more profitable. 

Lansky's plans had been developed five years earlier, in the spring of 1929, as he took his bride honeymooning in Atlantic City. Of course all the boys were there as well, attending the first ever, loosely organized, "secret four-day convention" of organized crime in America. As Al Capone later disclosed to an historian who interviewed him:

On the Boardwalk in Atlantic City

I told them there was business enough to make us all rich and it was time to stop all the killings and look on our business as other men look on theirs, as something to work at and forge when we go home at night. It wasn't an easy matter for men who had been fighting for years to agree on a peaceful business program. But we finally decided to forget the past and begin all over again - and we drew up a written agreement and each man signed on the dotted line.

The mobsters were looking to their future as liquor was about to go legit, as speakeasies and bootleg whiskey would soon become a thing of the past. Once it was again legal, most had no difficulty switching over to the smuggling of other illegal substances. It was the black market in tires during a period of war rationing which Henrik Kruger described in chapter 16--the manner in which he indicated his belief that President Nixon had made a connection with the mafia in Miami during WWII, while employed by the Office of Price Administration

It was through that job, Kruger says, Nixon met Bebe Rebozo and George Smathers, who were working together in a business selling retread (recapped) tires. Nixon was assigned to OPA's statutory interpretations section, which gave opinions on how the rationing provisions of the law would be applied on a case by case basis. 


By the time Nixon arrived at the job, the local boards had been organized and given quotas of how tire certificates would be issued. That year Miami's directory shows future Senator George Smathers was working with his brother, Benjamin Franklin (Frank) Smathers, Jr. at the law firm of Smathers, Thompson and Maxwell in the A.I. duPont Building, 149 E. Flagler. It's entirely possible, even if so far undocumented, that Smathers could have contacted the OPA office in Washington, D.C. on behalf of his high school classmate, Bebe Rebozo.

Smathers Family History

Before moving forward, let's go back a few years in order to learn a little more about the Smathers family background.

The Smathers brothers, while they were still in grade school, had moved with their attorney father, Frank Smathers, Sr.,  to Miami from Atlantic City, New Jersey. Frank, who had entered the practice of law in North Carolina in 1903, soon relocated to New Jersey and worked for a law firm established in 1898 by Judge Joseph Thompson and Clarence L. Cole. Judge Thompson was an expert in banking law, representing and serving as either an officer or director for several institutions in the city.

In 1911 New Jersey's Governor Woodrow Wilson appointed Cole to be a judge.  At that point, just as Judge Thompson was set to replace his partner Cole with Frank Smathers, the latter, like Cole, was also appointed to a bench by the governor. Frank Smathers then served as a judge for nearly ten years. When he grew ill and sought a warmer climate, he resigned and was replaced by his brother,William Howell Smathers, who had finished his legal studies in North Carolina in 1912 and followed Frank to New Jersey, working for the firm Endicott and Endicott. William served as judge from 1922 until he became a pro-New Deal U.S. Senator in 1937, supporting President Franklin D. Roosevelt 100% of the time. Defeated in 1942 for reelection by Albert W. Hawks, Smathers returned to his law practice until he ultimately retired to his hometown in North Carolina before his death in 1955.

In 1930, before becoming Senator,  Uncle William Smathers' home was at 5903 Ventnor Avenue, just outside Atlantic City. If you google that address today, you may be surprised to find that, in addition to being a good location to place a hotel if you happen to be playing Parker Brothers' Monopoly board game, Ventnor Avenue now merges into Atlantic Avenue northeast of U.S. Business 40, and if you follow Atlantic a few miles you might just stumble upon seven or eight gambling casinos. But hey, all that occurred long after the games was patented in 1932. A mere coincidence, right?


Carl Oglesby's Karmic Wheel


Oglesby with SDS, 1968
The source of the Smathers-Nixon rumor was elaborated upon by author Carl Oglesby, who posted the following at the Education Forum October 18, 2006, about three months before his death:

Nixon is commonly supposed to have been introduced to Bebe Rebozo by Richard Danner, the courier and connecter who left the FBI to become city manager of Miami Beach at a time when it was under the all-but-open control of the Mob.

Danner first met Nixon at a party thrown in Washington in 1947 by another newly elected congressman, George Smathers. Smathers was by that time already an intimate friend and business partner of Rebozo and a friend of Batista. When Nixon vacationed in Havana after his 1952 election to the vice-presidency, Syndicate-wise Danner used his clout with Lansky's man Norman "Roughhouse" Rothman to get gambling credit at the Sans Souci for Nixon's traveling companion, Dana Smith. We recall Dana Smith as the manager of the secret slush fund set up to finance Pat Nixon's cloth coats, the exposure of which led to the famous Checkers TV speech during the 1952 campaign. Smith dropped a bundle at the Sans Souci and left Cuba--without paying it back. Safe in the States, he repudiated the debt. That infuriated Rothman. Nixon was forced to ask the State Department to intervene in Smith's behalf.

It is poetically satisfying to imagine Nixon and Rebozo meeting through Danner. When Danner reenters in the next-to-last act of Watergate with the $100,000 from Hughes, which only he seems to have been able to deliver, we may sense a wheel coming full circle.

But there is the possibility also that Rebozo and Nixon actually connected in Miami in 1942, and it is almost certain that they knew of each other then, as will emerge.

Here are the fragments with which we reconstruct Rebozo:
(1) he is associated with the anti-Castro Cuban exile community in Florida;
(2) an all-Cuban shopping center in Miami is constructed for him by Polizzi Construction Co., headed by Cleveland Mafioso Al "The Owl" Polizzi, listed by the McClellan crime committee as one of "the most influential members of the underworld in the United States";
(3) his Key Biscayne Bank was involved in the E. F. Hutton stock theft, in which the Mafia fenced stolen securities through his bank. [The links involved court cases in which Rebozo's bank foreclosed a loan made to Charles L. Lewis of Atlanta, in which stock was held as collateral.]

Rebozo's will to power appears to have developed during the war, when he made it big in the "used-tire" and "retread'' business. Used-tire distributors all over the country, of course, were willingly and unwillingly turned into fences of Mafia black market tires during the war. Rebozo could have been used and still not have known it.

He was born in 1912 in Florida to a family of poor Cuban immigrants, was ambitious, and by 1935 had his first gas station. By the time the war was over, his lucrative retread business had turned him into a capitalist, and he was buying up Florida land. Before long he was buying vast amounts of it in partnership with Smathers and spreading thence into the small-loans business, sometimes called loan-sharking. From lending he went to insuring. He and Smathers insured each other's business operations. His successes soon carried him to the sphere of principalities and powers the likes of W. Clement Stone of Chicago and the aerosol king Robert Abplanalp, both of whom met Nixon through him. Also during the war, Rebozo was navigator in a part-time Military Air Transport Command crew that flew military transports to Europe full and back empty, which some find a Minderbinderesque detail [see Joseph Heller's Catch-22].

During the first year of the war, before going into the Navy, Nixon worked in the interpretations unit of the legal section of the tire-rationing branch of the Office of Price Administration. Investigator Jeff Gerth has discovered that three weeks after Nixon began this job, his close friend-to-be, George Smathers, came to federal court for the defendant in this case, United States vs. Standard Oil of Kansas. U.S. Customs had confiscated a load of American-made tires reentering the country through Cuba in an "attempt to circumvent national tire rationing," i.e., bootleg tires. Smathers wanted to speed up the case for his client, and so wrote to the OPA for a ruling. His letter must have come to Nixon, who, OPA records show, was responsible for all correspondence on tire rationing questions. It was therefore Nixon's business to answer Smathers. Especially since this was the first knock on the door, it would be nice to know what Nixon said and how the matter was disposed of.

"Unfortunately," reports Gerth, "most OPA records were destroyed after the war. The court file for this case is supposed to be in the Atlanta Records Center, but a written request submitted to the clerk of the civil court on July 6, 1972, has not been honored, despite the usual one week response time. Written questions submitted to President Nixon and Bebe Robozo have also gone unanswered. Among the relevant questions is whether Miami was one of the regional offices Nixon set up.

Was this the bending of the twig? And if Rebozo and Nixon actually did meet then, even if only through bureaucratic transactions around the flow of tires, then they met within the sphere of intense Syndicate activity at a time when Roosevelt's Operation Underworld had conferred immense prestige and freedom of movement on Syndicate activities. Could the Nixon-Rebozo relationship escape being affected by FDR's truce between law arid crime?

Let us spell out this theory of Nixon's beginnings in A-B-C simplicity.

Prohibition: Organized crime takes over the distilleries industry.

Repeal: Bootlegging goes legit, the Syndicate thereby expanding into the sphere of "legal" operations. This is the first big foothold of organized crime in the operations of the state.

Cuba/Batista: Lansky goes to Cuba in 1934 in search of a molasses source, meets and courts the newly ascendant strongman Batista, stays three weeks and lays plans for developing Havana into the major off-shore freezone of State-side organized crime, Cuba playing the role in the Caribbean of Sicily and Corsica in the Mediterranean.

World War II: In despair of otherwise securing the physical security of the docks against sabotage which may or may not have been Fascist-inspired, Roosevelt accepts a secret arrangement with organized crime. He comforts Luciano in prison and agrees to release him to exile at the end of the war. He generates an atmosphere of coalition with crime for the duration. In that atmosphere, Syndicate projects prosper. But one of the smugglers, Kansas Standard, gets too brazen and is caught, perhaps, by naive customs officials. Smathers takes the case for the defendant and thus comes into contact with Nixon.

Noting Gerth's discovery that the records of this case have inexplicably disappeared from the files, noting Rebozo's involvement in the tire business and his rapid enrichment during World War II, and noting Smathers's well-known affection for Cuban associations, we generalize to the straight-forward hypothesis that Nixon may have been fused to the Syndicate already in 1942. Was his 1944 stint in the Navy a sheep-dipping? Look at this rise: 1946: Nixon for Congress; 1948: Nixon for Congress (II); 1950: Nixon for Senate; 1952: a heartbeat away.

Yankees beget monster?
So it is another Dr. Frankenstein story. The Yankees beget in sheer expediency and offhandedness the forces that will later grow strong enough to challenge them for leadership. Operation Underworld was the supreme pioneering joint effort of crime and the state, the first major direct step taken toward their ultimate covert integration in the Dallas-Watergate decade.

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